Expert’s Voice: How to maintain consumer relationships during Covid19

Hotels need to focus on building customer relationships so they can recover quickly when the crisis ends. (Photo by Austin Distel on Unsplash)

Korosh Farazad, CEO at Farazad Investment Ltd, explains how hotels can take practical steps to improve customer relationships despite the impact of coronavirus on travel.

Since the coronavirus (Covid19) outbreak, the world has come to a complete halt. The effects of the virus are disturbing every aspect of people’s daily life. Hotels’ key performance indicators – like occupancy rates, ADR, and revenue per available room – continue to decline globally.

However, according to research by Knight Frank in April 2020, the return of demand in the UK hotel market including London and Edinburgh is likely to recover faster, and possibly be able to attain a full recovery by Q4 2021, if the lockdown is to be lifted by the end of June 2020.

Knight Frank states that it forecasts a V-shaped, stepped recovery, with occupancy growth beginning slowly in Q3 followed by substantially stronger growth in Q4 as travel confidence returns. This will then help to drive the ADR growth, leading to an overall recovery for the UK hotel sector. Q4 is also expected to see a surge in investment volumes.

Its research analyses the speed at which the UK hotel market has recovered following major events in the past, such as the economic downturns in 2001 and 2009, SARS and Brexit. These findings provide some hope for a return to positive growth numbers, notwithstanding there are still many unknowns ahead.

So, what should hoteliers do during the Covid19 crisis? We will discuss how to maintain consumer relationships in the hospitality sector throughout this hard time. As well as how that will lead to a better image of the hotel brand post-Covid19, when eventually the market is anticipated to slowly recover by next year.

The following is a powerful tool for hoteliers to prepare for the recovery after the coronavirus pandemic crisis.

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Customer Relationship Management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. It is a set of strategies, processes, programmes and systems to develop loyalty and repeat-purchase behaviour among customers.

It helps to grow a relationship with the customer from the first introduction and throughout the entire client’s lifecycle. It is the backbone of the hotel industry, maintaining the relationship with them always leads to positive outcomes. An increase in customer retention and satisfaction will increase repeat business and word of mouth.

1. Collect customer data

Customer database, transactional information and recording of interactions. Big data helps hotels deliver personalised proper CRM programmes.

2. Analyse customer data and ID high-value customers

Understand and analyse all types of information:

• Behavior (length of stay, types of service in the hotel such as spa or dining)
• Characteristics (age group, small or large group)
• Needs (event space, meeting room, group booking)
• Expectations (wifi, complimentary breakfast, concierge)

3. Develop CRM programs

Create loyalty programme – but make sure the programme is simple and transparent. Higher tier customers tend to be more loyal and they want to be rewarded for that. They tend to place more value on customer service than prices and promotions.

4. Implement CRM programs

Many CRM systems combine email, SMS and other forms of communications. While hotels are closed and people are not allowed to travel, staying connected to existing and new customers via the above mentioned is a great way to drive bookings when travel demand rises, as well as attract new upcoming customers. Some examples of CRM programmes to fuel growth are as follows:

• Keep your hotel website updated. Share recent policy, prevention plan and announcement regarding Covid19. Updates on when the hotel is planning to open for new reservations with special offers/promotions and exclusive experience packages.
• Allow flexible cancellation policy, ensuring customers feel at ease during this uncertain time.
• Launch an email campaign offering courtesy bonus or extra perks to incentivise cancelled reservations to rebook and purchase.
• Create personalised opportunities. Using data based on the preferences of your existing customers, you can present them with free room upgrades, spa or dining experiences. For corporate customers, it can be offering a tiered selection of meeting-room snacks in the hotel restaurant.
• Automated marketing campaign for birthdays or anniversaries of the past guest’s stay, encouraging them to rebook and enjoy the great experience.

In conclusion, CRM is a crucial management tool that hoteliers can use to achieve more revenue and maximise the value of customers. The hospitality sector’s greatest assets are the data and knowledge of its clients. It can use this asset as the key competitive edge to retain these customers who represent the highest lifetime value and profitability.